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Home Feature News

VinFast gains funds at US$3.5 million from its parent company

Syifa by Syifa
November 15, 2024
in Feature News, News
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VinFast

credit by VinFast

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Heaptalk, Jakarta — Nasdaq-listed EV manufacturer VinFast secured a fresh injection from its parent company, Vingroup, of about US$3.5 billion. This fund will accelerate VinFast’s global expansion.

As part of this plan, Vingroup will provide up to US$1.4 billion in loans to VinFast by 2026, while Vingroup Chairman Vuong will personally contribute an additional US$2.1 billion. Additionally, the group will convert approximately US$3.3 billion in existing loans into dividend-entitled preferred shares within VinFast Vietnam. This strategic maneuver ensures VinFast can access significant financial resources to support its operations and growth without depending exclusively on external funding sources.

This decision comes on the heels of VinFast’s remarkable achievements in Vietnam. The company recently made history by delivering over 51,000 electric vehicles in the first ten months of this year, securing its position as the country’s best-selling automotive brand and outpacing traditional gasoline-powered cars. Internationally, VinFast continues to grow its presence in the United States, Canada, Europe, the Middle East, and parts of Southeast Asia.

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Fund allocation and growth strategy of VinFast

In more detail, VinFast plans to utilize the funds from Vingroup for several strategic purposes, including:

  1. Operational support: Vingroup’s loan will stabilize VinFast’s cash flow as the company intensifies its efforts to expand domestically and internationally.
  2. International expansion: This funding will expedite the company’s efforts to establish a robust distribution network in the US, Europe, and Asia.
  3. Research and Development (R&D): The investment will enable the company to develop batteries and smart vehicles and allocate funds for R&D to expand and refine its product offerings.
  4. New sales model: VinFast is transitioning its distribution approach from a direct-to-consumer model to a dealership-based one, which will allow for streamlined distribution processes and cost efficiencies.

“VinFast’s milestone in the domestic market demonstrates our capabilities, and we are prepared to propel VinFast’s growth to lead the global transition toward electric mobility,” Vingroup’s Vice Chairman and CEO, Nguyen Viet Quang, said.

This strategic move will help VinFast reach a break-even point by 2026 and enhance its global market competitiveness. On the other hand, Vingroup emphasized that this financial support plan carefully considers the impact on the company’s overall economic health. Besides being funded through Vingroup’s business activities, the plan also accounts for the possibility of strategic divestment, should it be necessary to maintain cash flow.

Tags: EV manufacturervinfastvingroup

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